Chances are in your Mile High house hunt, you’ve run across the term “bank owned” or “REO” (real estate owned) properties. These types of properties can actually be a great value for first-time buyers or anyone in an area with limited inventory. The key is truly understanding what an REO property is and how to go about buying one. Keep the following considerations in mind as you search for the best REO property for your needs. You just might find it’s not as difficult a process as you may have thought!
1. Have a realistic timeline – REO properties can take longer to close
Just as in a traditional sale, after you make an offer on a bank-owned home, the bank may reject your offer if the price or terms do not meet the asset manager’s satisfaction. They may also counter your offer to purchase.
If you and the bank agree on a price, then you wait. Though not always the case, it often takes longer to close the sale when buying a bank owned property than when buying a home in a traditional sale.
2. Don’t expect a lot in the way of concessions
If you’re going the REO route, you’ll want to be sure to get an inspection, but don’t expect to receive any money from the bank to make repairs or any repairs to be made for you. In some cases, you can use the inspection report as a way to negotiate a lower sales price, but only if there aren’t multiple offers willing to pay more for the property.
3. Banks aren’t giving REO homes away
Don’t assume that all bank-owned properties are listed below market value. When listing a property for sale, the bank’s goal is to recoup as much of their money back as possible. Some of their properties go on the market for more money than they’re worth, but they often drop the asking price after it’s been in the market for a while.
Look at comparable properties in the area – whatever price those homes are going for is along the lines of what you can expect to pay.
If you’re ready to start checking REO properties, the first thing you need is an experienced professional on your side. Contact Metrowest today – we specialize in REO sales and would love to help you start the process!